Epic to sell pipelines after tariff wrangle

US-controlled Epic Energy has finally put all its Australian assets up for sale after failing to win high enough tariffs for its troubled Dampier-to-Bunbury pipeline.

Potential buyers began lining up after the West Australian Office of Gas Access Regulation in May announced revised tariff rates for the $2.4 billion Dampier-Bunbury natural gas pipeline that Epic said were too low.

Epic and the gas regulator have been engaged in a bitter wrangle over the tariff rate Epic can charge customers to transport gas through the pipeline from northern WA to Bunbury, south of Perth.

Epic said the regulator's ceiling on tariffs would not allow it to meet debt obligations to its syndicate of 28 banks or to proceed with a $500 million expansion of the 1530-kilometre pipeline, which is running at capacity.

The decision finally to sell the main WA pipeline comes after Epic's syndicate of banks agreed last week to give it a six-month extension, until March 16, on its repayments in the interests of an orderly sale.

Sources close to the sale said it was too soon to say whether Epic would quit Australia.

Epic yesterday confirmed two simultaneous sale processes would begin in a fortnight and were expected to end by early next year.

UBS will advise Epic on the sale of the Dampier-Bunbury pipeline, which is expected to fetch significantly less than the $2.4 million Epic paid for the asset.

Carnegie, Wylie and Co will advise on the sale of Epic's remaining assets, including the South West Queensland pipeline, the Moomba-to-Adelaide pipeline and Pilbara assets.

Among potential bidders for the Dampier-Bunbury pipeline are energy group Alinta, Wesfarmers and Alcoa World Alumina Australia.

Last month a consortium of WA companies, which take about 70 per cent of the gas channelled from Dampier to Bunbury, said it was looking to acquire the pipeline to ensure the expansion of the vital service.

Epic's decision follows a recent announcement by global utility Duke Energy that its Australian assets were under review.